Forum: Formula used for encashment of annual leave means public service lags behind private sector standards

The private sector is required by the Ministry of Manpower's employment practices guidance to pay salary in lieu of unused annual leave, by calculating the gross rate of pay based on the average number of days an employee is required to work in a week.

The public service, when paying for unused annual leave, calculates the gross rate of pay per day on a 5½-day work week even if a public servant is on a five-day work week.

The public service's argument is that since the work week is 42 hours regardless of whether a statutory board adopts a five-day or 5½-day work week, the leave encashment formula should continue to use a 5½-day work week.

Most of the public service has been on a 42-hour, five-day work week since 2004.

Assuming a private sector and a public service employee earn the same salary and work five days a week, a public servant would get about 10 per cent less than a private sector employee when paid salary in lieu of unused annual leave based on the 5½-day work week.

Lee Chiang Fong

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